"We're being treated better than virtually every other part of the budget.

Being the top priority in a bad year is proving to be as important as being a top priority in a good year," said Kevin Gordon, executive director of the California Association for School Business Officials.

The governor also proposes a $105 million increase for community colleges, a net increase of $40 million after cuts Davis made last year.

The University of California and California State University get a 1.5 percent increase in financing over this year plus money to cover enrollment growth.

Davis proposes no fee increases for either UC or CSU but offers no state money to cover the cost of keeping fees at current levels, said sources who have been briefed on his budget plan.

That could lead to the first increase in the average undergraduate fee of $3,964 at UC in seven years. UC regents are already weighing a fee increase to close their own budget gap, and CSU could also increase its undergraduate fee of $1,834.

The generosity of Davis to schools and a pledge in his State of the State speech Tuesday not to cut public safety, cash to cities and counties or raise taxes means the bulk of his cuts will fall on social programs.

"The governor will propose and the Legislature will dispose of the budget in whatever way they see fit," said Senate President Pro Tem John Burton, D- San Francisco.

"But I'll tell you one thing, we ain't going to balance a $12 billion deficit on the elderly, poor, disabled and mentally ill," Burton said.

Today, Davis lays out his plan to square up the state's $100 billion checkbook for the fiscal year that begins July 1.

Without cuts or other corrective action, Davis says, the state has written $12.2 billion more in checks than it has money to pay.

As Burton said, the blueprint offered by Davis is just that -- an idea to be debated, refined or changed by lawmakers who are supposed to complete a final budget by June 15.

Davis has already laid out a list of $2.2 billion in cuts he wants lawmakers to make in this year's budget to save money for the next budget cycle.

Among those are some $840 million in cuts to public schools.

If lawmakers go along with those proposed cuts, Davis' recommended increase of $1 billion in school spending next year would translate into a net gain of about $200 million in funding for K-12 schools.

Davis has yet to reveal what other cuts he contemplates, but sources familiar with Davis' plan say it includes temporarily reducing the reimbursement rate paid to doctors and hospitals under Medi-Cal, the state's health care program for the poor.

His budget expects the federal government to send California $350 million for security and anti-terrorism programs although the governor's spending plan only details how to spend $183 million of the money.

He banks on $900 million in savings by postponing for two years the employer contributions the state makes on behalf of state and nonteacher public school employees.

He also plans to borrow more than $1 billion from future payments owed the state from settlement of the lawsuit against tobacco companies.

"The more you can do with borrowing, the smarter it is because interest rates are so low," said Sen. Steve Peace, D-Chula Vista, chairman of the upper house's budget committee.

Yesterday, the governor also disclosed a plan to save the state $678 million by using revenue bonds to build 29 higher education construction projects.

"At times like this, we have to do all we can to create new jobs and stimulate the economy," he said at a construction site at the University of California at Davis.

The projects would start anywhere from a day to 10 months early, creating 13,000 jobs sooner than was scheduled, Davis said.

Among the specifics of Davis' public schools spending are a change in how money is given to districts to buy textbooks and other instructional materials.

Davis earmarks $625 million for those purchases, a $20 million increase from this year.